Pinnacle Entertainment (PNK) Misses Q3 EPS by 11c, Sales Beat

Pinnacle Entertainment (NYSE: PNK) reported Q3 EPS of $0.36, $0.11 worse than the analyst estimate of $0.47. Revenue for the quarter came in at $578.6 million versus the consensus estimate of $577.74 million.

Consolidated Adjusted EBITDA increased by $8.3 million or 5.9% year over year to $149.8 million. Consolidated Adjusted EBITDA margin increased by 100 basis points to 25.9%. The 2015 third quarter included $0.9 million of cost related to the final Lake Charles team member retention program payments and repair costs related to flooding in Bossier City, versus $6.1 million in the prior year period related to severance, Colorado referendum expense, and Lake Charles team member retention program costs.

Anthony Sanfilippo, Chief Executive Officer of Pinnacle Entertainment, commented, "Our third quarter results reflect improvements with key guest indicators throughout our portfolio of properties. We are pleased with the progress we continue to make in improving many aspects of how we operate our business.

"Our East Chicago property produced the strongest year over year improvement in our portfolio in the 2015 third quarter, with net revenues increasing 13.5% and Adjusted EBITDA increasing 38%. We continue to see improved results from our efforts with hotel yield management, overall gaming play, and the non-gaming offerings of the property, specifically our newest offering, Stadium Grille & Bar. Our focus is on providing exceptional experiences to our guests in the Chicagoland market.

"L'Auberge Lake Charles is performing very well in light of a new competitor that opened in December 2014, and we are pleased with the revenue, Adjusted EBITDA and profitability levels the property has produced. The market has demonstrated strong depth, with market-wide gross gaming revenues growing 30% in the 2015 third quarter and 33% year to date. Our property's revenue performance has been resilient due to its high quality operations and service levels, as well as our decade of experience operating in Southwest Louisiana. We have also made thoughtful refinements to its operating expense structure, which has supported its cash flow and profitability. We are excited about the future prospects for L'Auberge Lake Charles.

"L'Auberge Baton Rouge, which recently reached its third anniversary, continues to post results that better reflect the investment we made in this property. The property continues to make progress ramping up its operations and expanding its regional presence, while streamlining its cost structure. In the 2015 third quarter, Baton Rouge posted a 2.8% increase in net revenues and an 11.1% increase in Adjusted EBITDA.

"Operational changes and the addition of a new hotel in New Orleans are starting to produce meaningful results, with 2015 third quarter net revenues increasing 10.8% and Adjusted EBITDA increasing 16.8%. The hotel is gaining traction, rewarding our best guests, and increasing length of stay and play at the property. We have also made refinements to the non-gaming offerings of the property and improved the effectiveness of our marketing to our guests. We believe this property is in the early stages of improving its operating results.

"At Belterra Park, we made significant progress ramping up the operations of this new facility in the 2015 third quarter. The property continues to grow its market share, regional presence and daily gaming volumes. The property achieved record gross gaming revenues in the 2015 third quarter.

"We also made significant progress on enterprise wide initiatives, particularly in the areas of casino marketing and leveraging hotel revenue management tools to improve the productivity of our hotel room utilization. In the 2015 third quarter, table games drop increased by 18% year over year, excluding Lake Charles, with seven of our properties producing double digit percentage increases in this metric. We will continue to focus on growing this profitable revenue stream. With hotel room management, cash ADR increased by 5% during the 2015 third quarter combined with a 170 basis point improvement in occupancy, while guest WorthPAR increased by 5% year over year, excluding Lake Charles.

"As we progress toward the end of 2015 and into 2016, we believe our company is well positioned to continue to benefit from our high-quality portfolio of properties and a very talented management team. We are optimistic that the many operational excellence initiatives we have implemented will continue to drive improvement in our financial results," concluded Mr. Sanfilippo.

For earnings history and earnings-related data on Pinnacle Entertainment (PNK) click here.

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